Opinion
Index No. 59359/2019
06-23-2021
CHV 690-738 ALBANY AVE LP, Petitioner, v. Leonardo Lago PLANAS, Respondent.
For Petitioner: Diane Morgan For Respondent: Natalie James
For Petitioner: Diane Morgan
For Respondent: Natalie James
Jack Stoller, J.
CHV 690-738 Albany Ave. L.P., the petitioner in this proceeding ("Petitioner"), commenced this holdover proceeding against Leonardo Lago Planas, the respondent in this proceeding ("Respondent"), seeking possession of 738 Albany Avenue, Apt. 1J, Brooklyn, New York ("the subject premises") on the alleged basis of nuisance. Respondent interposed an answer. The Court held a trial of this matter on February 8, 2021, April 5, 2021, and May 17, 2021 and adjourned the matter for post-trial submissions to June 11, 2021.
The trial
Petitioner introduced into evidence a ground lease dated June 29, 2011 ("the Ground Lease") which designated a corporate entity called "CHV 690-738 Albany Avenue Housing Development Fund Corporation" ("the HDFC") as a lessee for the parcel of land on which the subject premises is located. Petitioner introduced into evidence an agreement dated June 29, 2011 between the HDFC and Petitioner ("the Declaration and Nominee Agreement") which transferred the HDFC's interest in the property to Petitioner. Petitioner also introduced into evidence a regulatory agreement dated June 29, 2011 ("the Regulatory Agreement") between Petitioner, the New York State Housing Finance Agency ("NYSHFA"), and the HDFC. Petitioner also introduced into evidence proof that there is a landlord/tenant relationship between the parties, that the subject premises is subject to the Rent Stabilization Law, and that Petitioner effectuated service of a predicate notice on Respondent pursuant to 9 N.Y.C.R.R. § 2524.3(b).
NYSHFA is a public benefit corporation created by the state to finance the construction of affordable housing. PHFL § 40 et seq.
Kareeb Beckham, Petitioner's property manager ("the Property Manager"), testified that in November of 2020 Respondent was very upset that a worker from the Administration for Children's Services ("ACS") had come to the subject premises and was being verbally aggressive, cursing and raising his voice; that, about thirty minutes after that, Respondent came to him and made accusations against him and threatened to knock him out. The Property Manager testified on cross-examination that Respondent was upset that an ACS worker showed up unannounced; that he only knows of one incidence of an ACS worker coming to the subject premises; and that he has helped Respondent on other matters.
Paula Greenstein, Petitioner's director of housing operations ("the Operations Director") testified that she helped Respondent move into the subject premises and that in 2020 there were reports about Respondent's disturbing acts. The Operations Director testified on cross-examination that tenants in the building in which the subject premises is located ("the Building") are provided support; that the Building is independent supportive housing; that she assisted in filling out the lease; that she knew that Respondent came in through a program for people with disabilities; that she does not know about supportive services that Petitioner provides; and that security personnel in the Building are encouraged to have mental health trainings in 2019 for help in dealing with tenants, particularly on how to defuse situations and how to calm people down. The Operations Director testified on redirect examination that the provider of social services is separate from Petitioner.
The Court held that this testimony was not admissible for the truth of the matter asserted.
Pedro Bryan, Petitioner's director of security ("the Security Director") testified that he works every day next door to the Building; that he frequently visits the Building; that he has worked there for four or five years; that he has training because Petitioner has special needs tenants; that he knows Respondent; that Respondent lived in the Building since about 2014; that he used to have a good relationship with Respondent; that in 2014, 2015, and 2016 Respondent frequently yelled and cursed in the lobby; that he tried to calm Respondent down; that he asked a case manager to deal with Respondent; that threats were being made toward him; that Respondent started making statements accusing him of disrespecting Respondent's wife; that nothing like that occurred; that no minors are allowed in computer room in the Building ("the Computer Room") at certain hours unless accompanied by an adult; that one day, kids were in the Computer Room with two young women; that he asked them why they were there; that, after speaking to them, he noticed Respondent's wife coming around the corner; that he greeted her; that she did not speak English; that he asked a porter to tell her in Spanish that her children had to be with an adult; that Respondent's wife nodded; and that, later that day, he came to the Building at 4:40 p.m. and Respondent called him an offensive epithet and accused him of cursing to Respondent's wife.
The Security Director testified that, in 2018 he was coming from his office toward the Building and was on his cell phone; that he saw Respondent's tractor-trailer; that Respondent and Respondent's stepson exited the tractor-trailer; that Respondent started cursing at him and accusing him of taking his photograph; that Respondent's stepson also accused him of taking his photograph; that they surrounded him and tried to grab his cellphone; that he told Respondent to stop; that Respondent, using profanity, threatened to punch him in his face and kill him; that the Security Director walked away; that his phone rang; that when he reached for his phone to answer it, Respondent sucker-punched him on the left side of his face by his eye and his forehead; that he was dazed because it was so sudden; that Respondent swung again but Respondent's stepson grabbed Respondent and referred to police; that Respondent and Respondent's stepson ran back to the tractor-trailer; that the Security Director regained his balance and called the Operations Director to tell her what happened and called security to call 911; that he got in his car and pursued Respondent's vehicle; that Respondent then tried to run him off the road; that police intercepted Respondent after he called police; that he pulled over; that police spoke to him; that the police took Respondent into custody; that the police let Respondent's stepson go; and that the police called EMS for him because his eye started to swell.
The Security Director testified that he obtained an order of protection against Respondent, not only for that incident but because Respondent made additional threats to him; that when Respondent saw him again after the incident, anytime they crossed each other's path, Respondent again threatened him, using profanity, saying that that had only been the beginning and taunting him by saying that Respondent knocked him out; that the last time that he had an interaction with Respondent was in 2020, when security told him that Respondent would not remove his dogs from the Computer Room; that he saw Respondent, Respondent's wife, and dogs in the Computer Room; that he asked Respondent to please remove the dogs; that Respondent cursed in his face and again wanted to fight; that he told Respondent that Respondent was not going to hit him again; that Respondent went back to the Computer Room; that Respondent's wife was telling him to stop and saying that they should leave; and that a dog urinated in the Computer Room.
Petitioner introduced into evidence an incident report prepared by a security officer.
Respondent introduced into evidence two contracts ("the First Contract" and "the Second Contract," referred to collectively as "the Contracts") between CAMBA, Inc., an acronym standing for the Church Avenue Merchants' Business Association ("the Social Services Provider"), and the New York City Department Of Health and Mental Hygiene ("DOHMH").
DOHMH is, inter alia , a social services district for purposes of the administration of health-related public assistance programs. N.Y.C. Charter § 551.
Respondent testified that he lives with Respondent's wife and their daughters, who are aged 14 and 16; that he was in a shelter before Respondent's wife came to this country in 2015; that he moved into the Building through a program; that his source of income is Social Security-Disability; that he has a mental disability ; that case managers visit the subject premises once a month and ask him questions; that his first case manager worked with him for two-and-a-half years but did not refer him to any other services; and that his current case worker does not provide him with services.
Respondent testified that he has not gotten any mental health services through Petitioner; that he got services from a hospital from 2014 to 2017; that the Social Services Provider's staff never spoke with him about this case and did not know about the case; that he only received a predicate notice; that no one worked with him to prevent this case from having been filed; and that no one working for the Social Services Provider tried to get him legal services.
Respondent testified that the Security Director is the bully of the Building and is there to make everybody afraid; that the Security Director said what he is going to do to him and he would put Respondent out; that he has not been intimidated and he spoke to the Security Director clearly and said if the Security Director did anything, it is going to be an issue; that he always hears that it is a personal issue between him and the Security Director; that he is five-feet-seven-inches tall and weighs 175-176 pounds; that the Security Director is twice the size of his body; that he thinks that the Security Director likes Respondent's wife and has requested things from her and the Security Director is there when Respondent's wife leaves the Building with his car window down, singing to her; that the Security Director called Respondent a punk; and that the Security Director said Respondent's wife will leave Respondent, as if Respondent's wife is a prostitute.
Respondent testified that, in July of 2018, he was waiting to park a vehicle in the street; that he saw the Security Director; that it looked like the Security Director was recording him and the vehicle; that he did not know what the Security Director was doing with his telephone; that he said to Respondent's stepson, do you see what I'm seeing; that Respondent's stepson said that the Security Director was recording them; that he asked the Security Director why he was recording him; that the Security Director denied that he was recording them; that he demanded to see the Security Director's phone to see if that was true; that the Security Director pushed him; that he punched the Security Director; that he does not use the kind of language that the Security Director said that he used; that he does defend himself, but he would not tell someone that he would kill them; that when he went to the police station, the Security Director was angry; that he told the police that the Security Director pushed him; that a police officer said that he should push the Security Director back; that he was arrested; that he signed a restraining order; that they went to Court for nine months back and forth; that he pled guilty to disorderly conduct and he had to take a course about violence; that he was acting in self-defense; that he put the order of protection in his wallet; that after that he entered the Building in 2018 the Security Director called him a punk again; that he called police and they wrote an incident report; that nothing happens with the Security Director anymore; that a case manager did not try to work it out between him and the Security Director; that they said it was a personal issue between the two of them; and that he has not had any incident or arguments with his neighbors.
Respondent testified on cross-examination that he last spoke to his current case manager three or four weeks ago; that his case manager called him every time there was a trial asking him about the subject premises and his family; that the last time he expressed that she should not contact him as a case manager because she was on the other side at this trial; that he had his first case manager for three-and-a-half years; that he does not remember the last time that he spoke to the case manager; that he never cursed out either case manager; that he had seven case workers; that he never used profanity with a prior case manager; that he complained many times about services and about having to go to public assistance about his share of the rent; that he got therapy at Kings County Hospital and assistance with medications that he could not get at the Building; that he knew that the Security Director liked Respondent's wife because he once saw her crying about him; that he did not think that the Security Director had the authority to ask why Respondent's wife was in the Computer Room; that he was aggrieved that the Security Director did not first ask her if she lived in the Building; that the Security Director used profanity with him when he asked the Security Director about that; that he told the Security Director that it was going to get worse if he kept doing things like that; that Respondent's wife told him that the Security Director demanded that she say "Hi" to him; that when he asked the Security Director why he talked to Respondent's wife like that, the Security Director was dismissive; that another time the Security Director tried to signal to his wife; that he went to the Security Director and they had an argument about it; that he was very upset; that the Security Director asked Respondent what Respondent was going to do and called him a punk; that he told the Security Director that he would see what kind of punk Respondent is; that Respondent's wife asked him to promise not to do anything to the Security Director; that he never heard the Security Director say anything to Respondent's wife; that he is not comfortable about the Security Director recording him; that he could not take the Security Director's phone away from him, because the Security Director is too big; that Respondent's stepson is 26 years old and is about the Security Director's size; that when the Security Director pushed him, Respondent's stepson was trying to calm the situation; that before Respondent's wife came, the Security Director spoke about policies that he did not know about, for example, about children being in the Computer Room; that the Security Director confronted his daughters when they were in the Computer Room; that his daughter cried; that later he was told that there are people living in the Building who have perpetuated sexual misconduct; and that he then went to the Security Director and told him to call him if he had any problem with a child.
Radhames Santana, Respondent's stepson ("Respondent's stepson"), testified that in July of 2018, he and Respondent were arriving home; that they parked in front of the Building; that he saw the Security Director taking out his phone and filming or taking pictures of them; that he told Respondent what he saw; that they then asked the Security Director why he was doing that; that the Security Director said that he was not taking pictures; that the Security Director put his phone into his pocket and said for them to leave him alone; that Respondent told the Security Director that he was not supposed to take a picture of him and asked him to please delete the picture; that they exchanged words; that Respondent was stepping back; that Respondent slapped the Security Director; that the Security Director ran to his car; that he told Respondent to get into his vehicle and go to the local precinct; that the Security Director started following them; that the Security Director is a larger person; that Respondent's stepson is about six-feet-four-inches tall; that the Security Director is about the same height but with more muscle; that he lived with Respondent and his mother two years ago; that Respondent acted in a regular way with neighbors; that they would chat about things; and that he gets along with other people.
Respondent's stepson testified on cross-examination that, in July of 2018, the Security Director was alone; that they had to walk across the street to get to the Security Director; that Respondent acted in a regular voice and in a regular way; that the Security Director and Respondent cursed at each other; that Respondent got pushed, but that he did not see Respondent get pushed; that he was trying to make the Security Director delete the picture; that before the moment that Respondent hit the Security Director, Respondent's stepson was looking for his mother and sister; that he did not know the Security Director before that day; that he was not living in the Building at that time; that he did not know when he moved in and moved out; that Respondent was arrested that day, not the Security Director; that Respondent is a strong man; that Respondent was not angry that day; and that the incident took a few minutes.
Eliana Santana, Respondent's wife ("Respondent's wife") testified that she lived in the subject premises for five years; that the Security Director is someone who provides services; that the Security Director has been insulting, offensive, rude, disrespectful, and bullying; that the Security Director demanded that she greet him; that she told Respondent that she felt harassed; that the Security Director said, how is it possible that you don't speak English; that the Security Director is the type of person who yells at women to exercise; and that Respondent does not threaten or harm other tenants in the Building.
Respondent's wife testified on cross-examination that the first time she met the Security Director, she was in the Computer Room with her daughters and she was sending emails to relatives, and the Security Director asked her what she was doing there; that her daughters translated and the Security Director mocked her for not speaking English; that her daughter was twelve years old at the time; that she saw the Security Director get into a fistfight with a couple and push someone out of a lobby; that she heard the Security Director use profanity with other tenants; that she has heard Respondent argue with staff members in the Building; that a staff member asked for her identification, and Respondent yelled at her and said that she did not have to show her identification; that she does not remember Respondent yelling at her or her children in the common area of the Building; that she feels harassed by the Security Director trying to interact with her outside of the Building; that he tried to catch up to her and tell her things once when she was walking to the subway, asking why she was not learning English and why she would not greet him; that she was subpoenaed to testify; that she used to go to the Computer Room a lot because she did not have a computer in the subject premises, but she has since gotten one; that she told Respondent of every incident and that she felt harassed; that Respondent went to Petitioner's office and spoke to them about what was happening; that she went with him; and that she did not sign recertifications.
Kevin Thomas ("Respondent's neighbor") testified that he has lived in apartment 1K in the Building since 2014, right down the hallway from the subject premises; that he sees Respondent occasionally; that he has pleasant interactions with Respondent; and that Respondent is a quiet and good guy who keeps to himself. Respondent's neighbor testified on cross-examination that he was not subpoenaed; that allegations about Respondent causing problems in the Building are not true; that he has never seen Respondent causing problems; that the Security Director abuses power; and that he never saw an interaction between the Security Director and Respondent. Respondent's neighbor testified on redirect examination that the Security Director is mean to people in the Building; that the Security Director talks in rude ways; that he did not have a problem with the Security Director; that he hardly spoke to the Security Director; that the Security Director has said that people could be evicted for bringing visitors to the Building; and that the Security Director told a surviving partner of a deceased tenant that she had to get out three days after her partner, the tenant of record, had died.
The Security Director testified on rebuttal that he does not have a personal issue with Respondent; that he never said anything offensive to Respondent's wife; that he never had an altercation with any other resident; that he never hit Respondent before Respondent punched him; that he would lose his job if he hit Respondent; that Respondent was a boxer; that he did not want to take on a boxer; that he did not push Respondent before he was punched; that before Respondent punched him, he was not shouting, but Respondent was; and that Respondent was demanding the phone and cursing at him.
The Operations Director testified on rebuttal that Petitioner owns and operates the Building, and is the landlord; that Petitioner is a separate entity from the Social Services Provider; that the Social Services Provider is a nonprofit that provides social services and support services like case management services, job placement, medical providers, and mental health providers; that Petitioner is just Respondent's landlord; that Petitioner does not enter into any social services contracts relating to Respondent's occupancy; and that she has never seen the Security Director treat women differently from men in the Building. The Operations Director testified on cross-examination that the Social Services Provider is a nonprofit; that Petitioner is a development arm of the Social Services Provider, under its umbrella; that Petitioner is a separate entity; that Petitioner is a limited partner with a tax indicator; and that DOHMH does not have a contract with Petitioner. The Operations Director testified on redirect examination that the subject premises is subject to the Rent Stabilization Law; that there is a lease between the parties; and that Petitioner did not sign any other document relating to the subject premises.
Discussion: Petitioner's pre-petition actions, predicate notices, and the petition
Respondent argues that Petitioner neither properly pled the full extent of the rent regulatory status of the subject premises in violation of RPAPL § 741(4) and that Petitioner did not comply with prerequisites for terminating Respondent's tenancy according to the Second Contract. In particular, page 329 of the Second Contract provides, inter alia , that the Social Services Provider will only attempt to terminate a client's tenancy as a last resort and after an ample opportunity for corrective action with a substantial direction and support from staff and that the Social Services Provider will assist in identifying alternate appropriate placement for clients who lose their homes. The First Contract also obligates the Social Services Provider to notify DOHMH thirty days before initiating eviction proceedings and further provides that the Social Services Provider will work with DOHMH to prevent evictions.
Respondent bates-stamped the Contracts. The page numbers of the Contracts that the Court refers to in this opinion reference Respondent's bates stamps.
See the First Contract at page 96.
If these provisions of the Contracts apply to Petitioner, then Respondent's argument has merit. Matter of Volunteers of Am.-Greater NY, Inc. v. Almonte , 65 AD3d 1155, 1157 (2nd Dept. 2009), Jasper, L.P. v. Davis , 63 Misc 3d 1209(A)(Civ. Ct. Bronx Co. 2019) (the Court cannot properly adjudicate a petition that fails to plead the existence of a contract between a landlord and a City agency that provides a tenant with defenses). Compare Fortune Soc'y v. Brown , 68 Misc 3d 956, 960 (Civ. Ct. Bronx Co. 2020), PCMH Crotona, L.P. v. Taylor , 57 Misc 3d 1212(A)(Civ. Ct. Bronx Co. 2017) (a petition was found to be defective when it did not plead the existence of a contract between DOHMH and a tenant, as that omission deprived the Court of notice that the tenant would have needed a guardian ad litem pursuant to CPLR Article 12). But See Pri Villa Ave. L.P. v. Santiago , 62 Misc 3d 1206(A)(Civ. Ct. Bronx Co. 2019) (a petition's failure to allege the existence of a regulatory agreement does not warrant dismissal when the regulatory agreement does not provide a tenant with additional protections regarding a termination of the tenancy).
Even assuming arguendo that the petition's omission did not prejudice Respondent, who, through counsel, clearly demonstrated an awareness of the Second Contract, the record still would not contain evidence of compliance with the Second Contract, to wit, a termination of Respondent's tenancy as a "last resort" after an "ample" opportunity for corrective action with "substantial" direction and support from staff. Noncompliance with such a provision comprises a ground upon which to dismiss a petition independent of pleading issues. Fortune Soc'y, supra , 68 Misc 3d at 959-60.
Petitioner argues that Respondent's counsel has settled other litigation with other tenants with Petitioner, citing unreported cases. However, these cases were not a part of the record at trial. Moreover, a deployment of prior settlements to defeat an argument made by an opponent in litigation would disincentivize litigants from settling cases, in violation of public policy. See CPLR § 4547. Finally, Petitioner does not show that Respondent was a party to the other litigation. The outcomes of litigation to which Respondent was not a party cannot collaterally estop him. Buechel v. Bain , 97 NY2d 295, 304 (2001), cert. denied , 535 U.S. 1096 (2002), Ji Sun Jennifer Kim v. Goldberg, Weprin, Finkel, Goldstein, LLP , 120 AD3d 18, 23 (1st Dept. 2014).
Petitioner also argues that the Social Services Provider, not Petitioner, was a party to the Contracts. Respondent argues in response that Petitioner and the Social Services Provider are essentially the same entity. The party's arguments occasion an examination of the evidence in the record — particularly the Contracts and the Regulatory Agreement — as to what relationship, if any, there is between Petitioner and the Social Services Provider.
The Contracts and the Regulatory Agreement
According to the Contracts, the Social Services Provider's address is 1720 Church Avenue, 2nd Floor, Brooklyn, New York, the same address of both the HDFC and Petitioner as stated in the Ground Lease, the Declaration and Nominee Agreement, and the Regulatory Agreement. An individual named Joanne M. Oplustil signed the Contracts for the Social Services Provider as its president and CEO, signed the Ground Lease for the HDFC as its president, signed the Declaration and Nominee Agreement for the HDFC as its president and for Petitioner as president of Petitioner's general partner, and signed the Regulatory Agreement for the HDFC as its president and for Petitioner as president of Petitioner's general partner.
See the First Contract at page 2 and the Second Contract at page 5.
See the First Contract at page 22 and the Second Contract at page 31.
The First Contract includes an audit of combined financial statements of both the Social Services Provider and other entities, including one named CAMBA Housing Ventures ("the Developer") for 2014 and 2015. The financial statement states that the Developer is a nonprofit affordable housing development company that develops and provides permanent supportive housing for low-income and formerly homeless individuals; that the Developer is an "affiliate" of the Social Services Provider; that the financial statements for the Developer and the Social Services Provider are combined; that the Developer and the Social Services Provider are affiliated through a common board membership; that the Social Services Provider and the Developer are collectively referred to as "the Organization"; that "the Organization" accounts for its investments in limited partnerships using the equity method of accounting, as the Organization "has significant influence over, but not control of, the major operating and financial policies of the [p]artnerships"; that the Social Services Provider and the Developer incur various costs during the course of real estate development projects; that these costs are capitalized until the project is transferred to a separate entity; that Petitioner is an "equity method investee[ ]" of the Developer through the Developer's 100% ownership in the HDFC; that HDFC's affiliated with the Social Services Provider own 100% of the stock in four related corporations who are the general partners in limited partnerships like Petitioner; that the general partners have a .01% interest in limited partnerships and are accounted for under the equity method; and that, on June 29, 2011, the HDFC transferred its assets to Petitioner to build affordable housing, which is consistent with the Ground Lease.
See the First Contract at page 168.
See the First Contract at page 171.
See the First Contract at page 174.
See the First Contract at page 177.
The Regulatory Agreement effectively provides that the Building is for affordable housing units for tenants with low incomes. The Regulatory Agreement says that Petitioner may transfer its interest without NYSHFA's prior written consent provided that the Developer "directly or indirectly maintains all operational managerial and financial control of" Petitioner, the HDFC, and the project to develop the Building.
See the Regulatory Agreement at ¶¶3.2(d)(1) and 4.2(a).
See the Regulatory Agreement at ¶5.5(c).
The First Contract includes a proposal that the Social Services Provider made to DOHMH to obtain the contract in the first place. In the proposal, the Social Services Provider speaks of the services that it provides the community in facilities developed by the Developer, the Social Services Provider's "separately incorporated supportive and affordable housing development affiliate," including the Building, which the Social Services Provider characterizes as "a $67 million national model of two LEED Platinum-rated buildings on side by side parcels at Kings County Hospital Center" which provides 209 affordable housing units, of which 146 are rented to individuals with serious mental illnesses. The proposal goes on to say, "We seek to identify the internal and external resources the client brings that we can build upon to help the client achieve stability and self-sufficiency. We address areas including mental health we encourage extensive client input so that we can develop a comprehensive initial service plan for each client that delineates mutually agreed upon short- and long-term goals with time frames for the achievement of each goal. The service plan identifies the services that the client needs to achieve their goals and defines the responsibilities of both the client and program staff. Once a service plan is in place, the assigned [Social Services Provider] Case Manager will work closely with the client to ensure that the client makes timely progress towards his/her goals Case management will focus on areas including psychiatric treatment housing crisis management [and] legal concerns. Staff will also pay special attention to factors precipitating housing loss in the past and current needs and difficulties. Staff will provide mental health treatment. For tenants who are in crisis, the Case Manager will follow up daily and the Program Manager will communicate and coordinate with the Case Managers to ensure that the tenant can remain stably housed. [The Social Services Provider] has extensive experience using the model of client-centered service planning and case management for tenants with mental illness in supportive housing settings, including congregate housing."
See the First Contract at page 115.
See the First Contract at pages 122-23.
The Social Services Provider's proposal goes on to say: "with regard to situations that may warrant terminating a tenant's sub-lease, we always begin with a letter to the tenant notifying them of the situation and asking them to see their case manager about working out a solution. We then schedule a case conference with the tenant to attempt to resolve the situation and develop a mutually agreed upon corrective action plan. We then take a suitable amount of time to attempt to put the plan into effect. This process includes referring the client to any needed supportive services and following up with the landlord. [W]e may work with the client to move to another more suitable location. If all other measures are unsuccessful, we will provide the designated City agency with 30 days' notice of our intent to proceed towards an eviction and will work with the City to try to prevent the eviction. If cooperation with the City does not resolve the matter, we will then undertake an eviction proceeding in the Housing Court including providing the tenant with a 30-day preliminary notice of intent to terminate the tenancy followed up with a 5-day notice. We will only file eviction papers with the Housing Court if we have prior approval from the City."
See the First Contract at page 133.
The Contracts obligate the Social Services Provider to provide services and activities in program areas listed and described in scope of work as Appendix B of the First Contract. The Second Contract refers to the Building; states that the Social Services Provider will provide housing to families who are or who are at risk of being chronically homeless with a disabled mental condition; states that the Social Services Provider will conduct a comprehensive needs assessment of each client upon his or her entry into the program and will collaborate with each client to develop an individualized housing and support services plan designed to support the client in maintaining health and housing; states that the Social Services Provider will provide support to clients to enable them to maintain independent housing; and states that the Social Services Provider will provide the client with a lease and collect 30% of the client's household income toward rent.
See the First Contract at page 4 and the Second Contract at page 226.
See the Second Contract at page 321.
See the Second Contract at page 322.
See the Second Contract at page 325.
See the Second Contract at page 326.
See the Second Contract at page 328.
Evaluating the effect of the Contracts and the Regulatory Agreement
Respondent does not seek to enforce a judgment against the personal income and assets of a limited partner or a shareholder of a corporation. Nevertheless, authority concerning "alter ego liability" when litigants wish to pierce a corporate veil provides instructive guidelines to help determine when to hold one corporate entity to account for the actions of another. While no one factor controls, Courts consider, inter alia , an overlap in ownership, officers, directors and personnel, Fantazia Int'l Corp. v. CPL Furs New York, Inc. , 67 AD3d 511, 512 (1st Dept. 2009), 888 7th Ave. Assocs. Ltd. P'ship v. Arlen Corp. , 172 AD2d 445, 445 (1st Dept. 1991), an intermingling of funds, Fantazia Int'l Corp. , supra , 67 AD3d at 512, 888 7th Ave. Assocs. Ltd. P'ship, supra , 172 AD2d at 445, common office space, the degree of discretion demonstrated by the allegedly dominated corporation, and whether dealings between the entities are at arm's length. Fantazia Int'l Corp., supra , 67 AD3d at 512.
Petitioner's general partner and the Social Services Provider have the same president. Petitioner and the Social Services Provider have the same address. According to the audit, "the Organization," consisting of the Social Services Provider and the Developer, maintains "significant influence" over, if not control of, the major operating and financial policies of partnerships such as Petitioner. The Developer connects Petitioner to the Social Services Provider in other ways. The Developer owns the corporate entity which owns a general partner of Petitioner and Petitioner may only transfer its interest in the Building without consent so long as the Developer maintains all operational managerial and financial control of the Building. The audit of the Developer and the Social Services Provider treats their finances as if they have been the same entity and states that the Developer and the Social Services Provider share common board membership. The Contracts and the Regulatory Agreement thus reveal the kind of factors that cause Courts to impute the obligations of one corporate entity upon another.
Furthermore, a determination concerning alter ego liability factors in evidence specific to a transaction at issue. Starr Russia Invs. III B.V. v. Deloitte Touche Tohmatsu Ltd. , 192 AD3d 525, 527 (1st Dept. 2021). The Regulatory Agreement obligates Petitioner to use the Building for affordable housing for low-income tenants. The connections between Petitioner and the Social Services Provider detailed above show how the Social Services Provider's proposal to use the Building for that very purpose is not sheer serendipity but rather a product of those connections. The Social Services Provider's proposal made representations to DOHMH about the services that it could provide to low-income disabled tenants in the Building, including representations that only a landlord could make, e.g., about leasing activities and restrictions on terminations of tenancies. In this context, DOHMH's award of contracts to the Social Services Provider to house low-income disabled tenants sits uncomfortably with any proposition that the Social Services Provider has nothing to do with some unrelated landlord out there who can evict its clients in isolation from any obligation of the Contracts. Petitioner and the Social Services Provider are not just two entities with incidental shared features. They combine those shared features with a common purpose at the heart of this litigation.
Conclusion
Based upon this record, the provisions of the Contract bind Petitioner with regard to handling terminations of tenancies. Petitioner's failure to plead and, more importantly, prove that it abided by the Contracts in its termination of Respondent's tenancy therefore renders the petition defective.
A dismissal on such a ground is not on the merits. As the conduct that Petitioner states herein is serious enough to remain actionable, a dismissal of this matter is without prejudice to Petitioner's recommencement of a nuisance holdover proceeding in compliance with the Contracts, which Petitioner may predicate on the conduct alleged in this matter, without prejudice to Respondent's defenses. Subject to this qualification, it is ordered that the Court dismisses this matter.
This constitutes the decision and order of the Court.